14 Nov 2018 07:00
Regency Mines Plc
("Regency" or "the Company")
Business Update: Mambare Nickel/Cobalt operations
Framework Agreement reached with JV Partner
14 November 2018
Regency Mines Plc (LON:RGM), the natural resource development and investment company with interests in hydrocarbons and base metals, announces an update in respect of the Mambare nickel/cobalt project (the "Project") in Papua New Guinea.
Mambare is a large nickel/cobalt deposit with a substantial JORC compliant Inferred and Indicated Mineral Resource, in which Regency has a 50% interest.
Highlights:
● The Regency JV's licence renewal application for EL1390 has been recommended for approval by the Mining Advisory Council in Papua New Guinea and awaits Ministerial signature;
● As part of the renewal application Regency has submitted on behalf of the JV a new work plan in respect of the Project;
● Regency has reached a new Framework Agreement with its 50% joint venture ("JV" or "Joint Venture") partner Direct Nickel (Projects) Ltd ("DniP") and its related parties;
● Regency has received interest from third parties wishing to co-operate on development of the Mambare project and these options will be considered by the JV partners;
● Nickel spot prices are currently about US$11,660 per ton and cobalt US$46,660 per ton;
Andrew Bell, Chairman of Regency Mines commented "The Mambare project joint venture we have always considered a remarkable opportunity for Regency Mines and the anticipated renewal of the exploration licence for two years occurs at a key point in the mineral cycle where interest in nickel and cobalt is increasing enables us to plan strategically.
Representatives of the joint venture including partner representatives are currently on site in Papua New Guinea as part of the planning process for the work programme, a\nd are also looking into the possible economics of a direct shipping ore operation.
We welcome the agreement reached with our JV partner. We had conveyed concerns relating to changes in their structure and how their share of expenditure would be funded. The new arrangements allay these concerns, we welcome their new commitment, and now we will address the issues of future funding and exploration co-operatively, to the great benefit of both parties.
This is a relief and a step forward for us and puts the Joint Venture in a position to raise its profile and increase its activity level at the Mambare-Botue Nickel-Cobalt Project at just the right moment.
As noted, we have not yet received formal notice of licence renewal and will provide further updating on this and other matters."
Further Information - Mambare Project
Summary:
● The Mambare project sits on exploration licence EL1390 covering 256km2 I in Papua New Guinea;
● The project holds a JORC compliant Resource totalling 162.5 million tonnes of 0.94% nickel and 0.09% cobalt;
● The current JORC compliant Resource is in respect of slope areas and cover only a small part of the mineralised plateau;
● In-situ nickel within the Mambare Resource totals 1.53million tonnes and in-situ cobalt 146,000 tonnes;
The project sits on license EL1390 and contains a JORC Indicated and Inferred Mineral Resource Estimate of 162.5m tonnes at 0.94% nickel and 0.09% cobalt. With only 3% of the 80 square kilometre main plateau target tested by drill to date, the Company has long indicated that the project potentially holds one of the world's largest nickel laterite deposits.
Details of the Company's announcement of 13 June 2012 announcing the latest JORC-compliant Mineral Resource Estimate for Mambare may be accessed on the Regency website at: https://irpages2.equitystory.com/websites/rns_news/English/1100/news-tool---rns---eqs-group.html?article=20159228&company=rgm
Regency has submitted on behalf of the joint venture a work plan for the next two years to the mining authorities. The work plan provides for an early extension of the ground penetrating radar coverage to include the bulk of the plateau. This relatively inexpensive initial programme will inter alia open the possibility of enlarging the Mineral Resource Estimate by exploring the remaining areas.
Work undertaken by the Company to date indicates a likely continuity of mineralisation across the plateau surface, which ultimately may be demonstrated by further drilling. It is however noted that the magnitude of the existing JORC compliant Resource is such that additional drilling to demonstrate a yet larger resource is not an immediate requirement.
Framework Agreement
Changes in control of DniP could have led to a deemed sale offer by DniP to Regency under the JV agreement. Following a period of discussion between the parties, RGM has now consented to the change in control and for a further anticipated change whereby DniP moves its interest into a separate SPV through which the interests of its existing shareholders and stakeholders will be held.
The parties have agreed that Regency will act as the information hub of the JV, will be responsible for the initiation of draft budgets and work programmes, and will carry out central accounting and administration functions. Reporting lines from Papua New Guinea will run through the Regency office, and Regency will convene fortnightly meetings of a JV committee. All decisions on budgets, personnel, programmes, strategy and finance will be taken jointly. The parties will work together on further updates to the corporate structure of the JV and the JV agreement.
The Company has been approached by third parties interested in co-operating on the Mambare project. Regency and its JV partner will assess and consider these options.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information contact:
Andrew Bell 0207 747 9960 Chairman Regency Mines Plc
Scott Kaintz 0207 747 9960 Executive Director Regency Mines Plc
Roland Cornish/Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson 020 7374 2212 Broker First Equity Limited